Jonathan Holslag, a research fellow at the Brussels Institute of Contemporary China Studies, has written another piece that should be added to the growing pile of Year of the Dragon predictive pieces:

It’s this diplomatic claustrophobia that explains why Chinese leaders have been so eager to promote the idea of a harmonious world. What sounds like a fuzzy slogan, therefore, is actually seen by China as a diplomatic necessity.

And Beijing hasn’t been entirely unsuccessful in promoting these ideas. Asians, Africans, Americans, and Europeans have all echoed the need for closer relations. There has been the promise of trade, which China has carefully cultivated by stressing that an open economic order would bring about a beneficial division of labor. Cooperation through international organizations, which China eagerly joined, was supposed to help settle disputes.

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Beijing believes that it has to stick to a bold industrial policy to keep its people at work, but struggling markets elsewhere are becoming fed up with what is perceived as unfair competition. Meanwhile, this Chinese brand of mercantilism breeds bubbles everywhere, placing the architects in Zhongnanhai under pressure from even more conservative comrades. The result is that China doesn’t feel confident at all, and in private, decision makers concede that some serious turbulence is in the offing.

But that isn’t necessarily how others perceive it. Neighbors are calling upon Washington to balance China’s growing military prowess. Countries that initially bought into free trade agreements with China complain that it is becoming too influential. Resistance is mounting, and it is this confluence of events that makes diplomacy tense.

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“Look at Russia,” a student uttered during a heated debate at one university in Beijing, “When did Europe and America bully it? When it did not dare to clench a fist. Only with a strong leader, it got respected.”

That strongman in Moscow might have lost his prestige, but statements like these illustrate how China’s next generation of leaders is expected to play hardball in the international arena. With China’s economic future looking grim, those expectations could offer Party bosses like Xi Jinping a new opportunity to shore up their esteem with a much more troublesome brand of nationalism. And with thorny issues like Taiwan, the South China Sea, the disputed border with India, and various trade disputes moving again to the forefront, the Year of the Dragon could be a major turning point in China’s rise.